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Automaker bailout and unions

The economic bailout has been a major topic of call-in “news” shows or a bit now. I recently heard a very interesting set of opinions voiced by a worker int eh automotive industry, at one of the companies receiving a large amount of your tax dollars.

His opinion (summarized drastically) went something like this:

  • It is unfair and morally wrong to reduce any benefits/pay/compensation to automotive workers.
  • If the automakers are forced into chapter 11 (bankruptcy) the “executives” will make out like bandits, and the “workers” will get screwed.
  • Chapter 11 would be used by management to screw the unions, who can do no wrong, and exist purely to protect the workers.
  • Any automotive (or other manufacturing company) that sends jobs overseas is Evil, and they are really the ones causing the economic failure.

Now, I have to admit that some of these ideas made me think. I particularly had to ponder the idea that autoworkers and auto unions are the victims of the failure of hte US auto industry. After a lot of thought, I decided to blog as bit. First, some family history: much of my extended family live in the Detroit area, and have worked in the auto industry for generations. Because my immediate family does NOT live/work in the Detroit area, I only know a few autoworkers very well, but their work experiences are worth reviewing. One cousin has spent his entire working career at a car plant on the assembly line – sort of.  The “sort of” bit is the important part.

There have been a number of times when the plan experienced a slow down. That means that the plant was producing more cars than could be sold, so the production was “slowed down”. This is accomplished by reducing the numbers of people working the assembly line, and allowing the line to stand idle for some shifts. Now, in a normal company, this would be accomplished by laying off the workers for that shift. Unfortunate for the workers, but (in theory) when business picks up again, the workers are re-hired. Of course, Unions don’t like this – laid off workers don’t pay union dues. So, instead, when my cousin’s assembly line was “slowed down”, the union contract required that he was simply told not to come to work, but was still paid, still received full benefits, and (of course) continued to pay his union dues. The real kicker is that this situation lasted for almost 5 years. Ever wonder why US made cars are so expensive?

Of course, this type of Union hackage doesn’t fly anymore. After all, that sort of fiscal stupidity is what is driving US automakers into insolvency. Now, instead of being told to stay home, he actually has to come to work. Where he spends the day in an “on-call” room waiting for something to do.  Because he’s actually at the plant, he must be working, right? Turns out that “working” means reading the paper, playing cards, and sleeping. Mostly sleeping because he figured that there was no reason to not pick up another job and get paid to sleep at the car plant…. Did I mention that he owns a huge ranch outside of Detroit, lives   fully-paid for mansion, and buys a new car every year? Tough times for those union autoworkers, eh?

Which bring us to another concept that I have a hard time with: overseas factories.  Of course, unions hate these because those overseas workers don’t pay union dues. Of course, those overseas workers also recognize that assembly line workers are pretty much dime-a-dozen, and eminently replaceable. Kinda like the kid that flips burgers at McDonalds.The big difference between the burger-flipper and the automotive Assembly line worker is that the autoworkers have a union, and the union has managed to convince folks that assembly line workers deserve pay comparable to the engineers that design the cars. Of course, the Engineers are highly educated and trained professionals that are not dime-a-dozen and easily replaceable, but hey, this is the USA. Everyone is equal, so that guy that dropped out of high school and got a job pushing buttons on a machine deserves the same lifestyle and salary as the guy that spent years acquiring the skills needed to figure out how to engineer an airbag.

The simple reality is that the decisions we make early in life DO impact our later lives. Deciding to punt school and go work in a factory is accepting the fact that your earning potential should be alot less than the kid that goes to college and acquires some marketable skills. In the countries that we export our factory work to, the people that work in the factories KNOW that they accepting a job that will leave then in the lower echelons of society. In many cases, this is a step up, in many cases, it is simply staying where their parents were, and in many cases, it is a step down. Being a factory worker means that they WON’T be buying a nice, big house, they won’t be buying new cars on a regular basis, and will (in all likelihood) be living on the economic edge for the rest of their lives. Nice? definitely not. But it does make it possible to manufacture goods at costs that make sure they are still affordable.

Here, where an assembly line worker expects (and demands) that they make a salary comparable to the highly skilled employee, we are simply guaranteeing that the products produced will be too expensive to be able to compete with the companies that outsource overseas. We have a couple of simple choices:

  1. Accept the fact that manufacturing jobs are low-paying, and that the people who end up in those jobs (for whatever reason) are destined to not live the “American dream”.
  2. Accept the fact that the only way to economically produce goods is to ship the production facilities overseas to places where labor is cheap.
  3. Accept the fact that goods produced in the USA are simply a lot more expensive, and attempt to apply tariffs or other devices to make up for our inability to compete economically.

Of course, an corollary of all of these is recognizing that unions have followed the path of all organizations. They no longer work to help and support the workers, the work simply to support themselves. Like all bureaucracies, they have matured to the point where the original reason for their existence is a weak side note to their efforts to ensure their continued existence and growth. The only people the unions truly benefit are the union leaders…

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2 Responses

  1. I wonder if this isn’t somehow related to my students who don’t want to have to EARN their education by, you know, showing up to class and doing the work. Instead, they expect to come to “work” and essentially sleep on the job – but they still want the benefits that come from earning the knowledge and gaining the skills. Sigh.

    MY problem with the way we’ve got stuff organized is that when a company “downsizes” or suffers a “slow down,” it’s the poor guys at the bottom, who can least afford it, who get shafted. I understand, intellectually, that this is how it is – the little guy always gets shafted – but it seems wrong to me on a lot of levels that we’re laying off the bottom feeders while the executives are fat, dumb, and happy and taking home bonuses that exceed a bottom feeder’s pay…

  2. I think the two pints may be related. In many (not all) cases, the folks at the bottom are there because they didn’t have the motivation to acquire the skills to get off the bottom (not all, mind you, but a lot).
    The whole “i can just show up to school, and pass” morphs into the “I can just get an easy job, and get paid”. Of course, because there are so many people that follow this model, they are also easily replaceable.

    Plus, what BOSS is going to eliminate HIS job, when he can save just as much by punting a few low-level, completely replaceable unmotivated slackers?

    Doesn’t justify the insane bonuses, but (in most cases) the folks at the top (and usually in the middle too) are there because they worked, learned skills, and proved that they should be there (Most, not all…).

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